Patricia Reynolds, 51, who is disabled and lives alone, says she lost £180 a month, while a 38-year-old woman identified only as TD and her severely disabled 12-year-old daughter received £140 less a month for 18 months.

They claim that having been transferred on to Universal Credit because of "errors" made by the Department for Work and Pensions (DWP), they were unable to return to their previous, higher level of welfare payments.

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They were also not eligible to receive "transitional protection" payments, cash top-ups designed to cover shortfalls for people moving on to Universal Credit.

Campaigners outside the Royal Courts of Justice in London supporting the legal challenge against Universal Credit (Image: PA)

Lawyers for the trio, whose case is being supported by the Child Poverty Action Group (CPAG), told the court on Wednesday (January 23) their "less favourable treatment" is unjustified.

Tom Royston, representing the claimants, said: "The claimants are complaining about, and seeking relief to alter, a state of affairs which is currently causing thousands of claimants to be worse off than they would otherwise be."

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Mr Royston said the claimants are seeking a declaration they have been "unlawfully discriminated against" as well as damages for their financial loss, distress and inconvenience.

Lawyers for Work and Pensions Secretary Amber Rudd, who the case is being brought against, argue the new payments under Universal Credit are "lawful" - as is the process by which some claimants are transferred on to the new system before others.

Campaigners outside the Royal Courts of Justice in London supporting the legal challenge against Universal Credit (Image: PA)

Edward Brown, for Ms Rudd, said the claim is "in truth, a social policy disagreement dressed up as a legal challenge".

He also said the Secretary of State "disagrees" there should be transitional payments in circumstances where people have moved to Universal Credit before its planned mass roll-out.

He added: "However desirable the provision of cash might be on the facts of an individual case, the (Secretary of State's) view is that transitional protection is not a desirable use of public monies at this time and in these cases."

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Universal Credit was created in 2012 as a replacement for various means-tested benefits including income support, housing benefit and child tax credit.

The DWP has more recently introduced measures to prevent people from transferring to Universal Credit before the first planned "mass migration", which is due to take place in July, and also to compensate people who suffer losses by moving to the new benefit.

However, CPAG says those who are more severely disabled will still be more than £100 a month worse off under UC than the previous arrangements.

The Jobcentre Plus in Truro (Image: Sally Adams)

CPAG solicitor Carla Clarke said: "We say what happened to (the claimants) is both irrational and unlawful discrimination, treating them less favourably purely on account of DWP's own incorrect decisions.

"To their credit, they are bringing the case to stop any more claimants from having to take the fallout of DWP's poor decision-making."

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The case is the latest challenge over Universal Credit to reach the High Court and follows a victory earlier in January for four working single mothers, who claimed they were struggling financially because of the way their Universal Credit payments were calculated.

Two senior judges concluded the Secretary of State for Work and Pensions had "wrongly interpreted" the relevant regulations.

A DWP spokeswoman said: "Universal Credit is a force for good and over 1.6 million are receiving the benefit successfully."